LCK/CS/2019-20/                                                                     January 29, 2020

Dear Sir(s)

FINANCIAL RESULTS FOR THE HALF YEAR ENDED DECEMBER 31, 2019

This is to inform you that the Board of Directors of our Company in their meeting held on Wednesday, January 29, 2020 at 4:30 p.m., at 6-A, Muhammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi-75350 recommended the following:

(I)         Cash Dividend                                          Nil

(ii)        Bonus Issue                                             Nil

(iii)       Right Issue                                               Nil

(iv)       Interim Dividend                                        Nil

The financial results of the Company consisting of Statements of Financial Position, Statements of Profit and Loss and Other Comprehensive Income and Directors' Report are annexed.

The Half Yearly report of the Company for the period ended December 31, 2019 will also be transmitted through PUCARS separately, within the specified time.

Yours truly

for LUCKY CEMENT LIMITED

IRFAN CHAWALA

Director Finance / CFO

The Directors have the pleasure in presenting to you the financial results of your Company which include both, stand-alone (duly reviewed by the auditors) and consolidated unaudited financial statements for the half year ended December 31, 2019.

Cement industry in Pakistan grew by 6.5% to 24.75 million tons during the half year ended December 31, 2019 in comparison to 23.23 million tons during the same period last year. Local sales volume registered a growth of 3.5% to 20.37 million tons during the current half year in comparison to 19.67 million tons during the same period last year. Export sales volumes registered an increase of 22.9% to 4.38 million tons during the half year under review as compared to 3.56 million tons reported in the same period last year.

In comparison to the Cement Industry, your Company's overall sales volumes declined by 8.4% to 3.68 million tons during the current half year ended December 31, 2019. The local  sales volumes registered a decline of 13.3% and were 2.59 million tons in comparison to 2.99 million tons during the same period last year, however, the export sales volumes of the Company improved by 6.0% to 1.08 million tons as compared to 1.02 million tons during the same period last year.

On a consolidated basis, your Company achieved a gross turnover of PKR 79.56 billion which is 17.3% higher as compared to the same period last year's turnover of PKR 67.85 billion.

Moreover, consolidated Net Profit of the Company was PKR 3.92 billion of which PKR 0.71 billion is attributable to non-controlling interests which translates into an EPS of PKR 9.93 during the current half year ended December 31, 2019 as compared to PKR 17.92 during the same period last year.

a.   Production & Sales Volume Performance - Standalone

The standalone production and sales statistics of your Company for the half year ended December 31, 2019, compared to the same period last year are as follows:

The production and sales volume data is graphically presented as under:

A comparison of the dispatches of the Industry and your Company's standalone business for the half year ended December 31, 2019 compared  with the same period last year is presented below:

b.   Financial Performance - Standalone

Brownfield cement plant expansion in KPK Province of Pakistan - 2.8 million tons per annum.

Construction and installation after slight design modifications with respect to the additional line of 2.8 million tons per annum has been successfully completed as per the given project completion timelines. The new line was made operational with the commencement of Clinker production on December 30, 2019. The total production capacity (including both North and South plants) of the Company has now increased from previous 9.35 million tons to 12.15 million tons per annum.

Investment in 1 x 660 MW, supercritical, coal based power project

The construction activity for setting up 660 MW super critical, lignite coal-based power plant is in full swing with over 60% of project completion to-date. With the completion of major design / engineering works and the expected on-site arrival of all the critical equipment in the months of February and March, the commissioning team of SEPCO III is now fully mobilized at the Project site.  

Target to achieve commercial operations is 1^st March 2021.

Greenfield cement plant expansion in Samawah, Iraq - 1.2 million tons per annum

Fabrication and erection work is in full swing and Project timelines are being met. Necessary manpower and contractors have also been mobilized at the Site. The contract for Cement grinding mill, Packing plant and additional Power generator is also finalized and Letter of Credit has been established.

Target to achieve commercial production is by the second quarter of financial year 2020-21.

With the primary focus on Education, Women empowerment, Health and Environment conservation, your Company remains committed towards progressive development of society and the communities in which it operates.

Education / Scholarships

Your company continues to support the deserving and less privileged segments of the society through provision of merit-based scholarships to various students of IBA, IoBM and other leading universities in Pakistan and abroad.

Women Empowerment

Your Company's focus on women empowerment through education remains an ongoing process with the collaboration of Zindagi Trust by supporting two leading Government girls' schools in Karachi. These schools have been transformed into model girls' educational institutions in Pakistan.

Health Initiatives

The quality healthcare provision has always been your company's priority especially through the financial support of Aziz Tabba Foundation; a prominent philanthropic institution that is running Tabba Heart and Tabba Kidney institutes, which provide vital support in bridging the gap of specialized and modern medical care in the Country.

Environment Conservation

Your Company always takes serious responsibility towards the preservation of the environment and in an effort to highlight the importance of environment conservation; your Company continued with its pro-environment initiatives including tree-plantation drives in and around its manufacturing sites.

Despite current economic challenges, there has been an overall growth in both Domestic and Export off-takes.

The Outlook of the Cement industry will continue to be challenging due to availability of excess capacity in the North region, which will put adverse pressure on pricing. Whereas, prices for exports from South are also very competitive due to surplus supplies available in the Region. The input costs may also rise in the future, due to higher electricity and gas tariffs, which will increase the production, as well as logistics costs.

Directors of your Company take this opportunity to express sincere gratitude and appreciation for unrelenting commitment and contribution of its people and the trust and confidence placed in the Company by all the stakeholders.

On behalf of the Board

MUHAMMAD YUNUS TABBA                            MUHAMMAD ALI TABBA

Chairman / Director                                                    Chief Executive / Director

Karachi: January 29, 2020

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